Foreign Cheque Clearance Fees

If you receive cheques from overseas (e.g. US), be prepared to pay foreign cheque clearance fees, which ranges from $10-25. E.g. DBS charge approximately S$21 for a US$125 value cheque. I had opened a Citibank account previously, as they do not charge a processing fee. Awesome! But since Sep 2014, there is now a $15 processing fee implemented for foreign cheque processing at Citibank. So take note. I need to find an alternative method so let me know if you know of any!

How are foreign cheques cleared?

There is no overseas cross-border cheque clearing system. A foreign cheque is a cheque issued in a foreign currency and payable at a foreign bank. Therefore, for payment purposes, foreign cheques payable to beneficiaries in this country have to be sent abroad to the bank on which they are drawn. This process often takes several weeks and can be expensive as it is done on a cheque-by-cheque basis. This process is called “collection” (as in collection of funds). Typically, there is a processing time of around two weeks before funds are available. on a foreign cheque. Most do but the charges vary from bank to bank.

Can exchange rates affect the value of a foreign cheque?

Yes. By the time the beneficiary bank has received payment from the overseas bank, the exchange rate may have moved so the beneficiary customer may get less money than would have been the case on the day the cheque was paid in.